Holding

Under the 1939 Act the insurer is not liable for compensation to gratuitous passengers in a goods vehicle, while under the 1988 Act as amended in 1994 the insurer is liable for compensation to the owner or authorised representative travelling in a goods vehicle, and new pleas cannot be raised without prior pleading.

Summary

The Supreme Court examined a large batch of appeals concerning compensation claims arising from deaths or injuries of persons travelling in goods vehicles. The claimants argued that the insurer was liable under Section 95 of the Motor Vehicles Act, 1939 and Section 147 of the Motor Vehicles Act, 1988 (as amended in 1994). The Court held that under the 1939 Act the insurer is not liable for gratuitous passengers, including the owner or his representative, and that liability rests with the vehicle owner. Under the 1988 Act, as amended in 1994, the insurer is liable to pay compensation to the owner or his authorised representative travelling in a goods vehicle, but not to gratuitous passengers unless specifically claimed. The Court also ruled that a new plea regarding ownership cannot be raised at the appellate stage unless it was pleaded earlier. Consequently, the appeals were dismissed and the insurer was directed to pay the awarded amounts where liability was established.

Issues considered

Whether the insurance company is liable to pay compensation under Section 95(1)(b)(i) and proviso (ii) of the Motor Vehicles Act, 1939 for gratuitous passengers, including the owner or his representative, travelling in a goods vehicle.
Whether the insurance company is liable to pay compensation under Section 147(1)(i) and (ii) of the Motor Vehicles Act, 1988 (as amended in 1994) for the owner, his authorised representative, and gratuitous passengers travelling in a goods vehicle.
Whether a new plea concerning the status of the persons as owners or representatives can be raised at the appellate stage without having been pleaded earlier.

Legislation cited

Subjects

insurance liabilitymotor vehicles actcompensationgratuitous passengersgoods vehiclesection 95section 1471994 amendmentnew pleaappellate procedure

Judgment

RAMESH KUMAR A
v.
NATIONAL INSURANCE CO. LTD. AND ORS.

AUGUST 17, 2001

[A.P. MISRA AND U.C. BANERJEE, J.J.] B

Motor Vehicles Act 1939/Motor Vehicles Act 1988 (as amended in
1994)-Section 95/Section 147.

Compensation-Liability of insurance company-On account of death C
or bodily injury, of the gratuitous passengers, including owner of the goods
or his representatives travelling in a goods vehicle-Liability under three
categories-First under the 1939 Act as amended in 1969-Second under
the 1988 Act prior to its amendment in 1994-Third under the 1988 Act
pursuant to its amendment in 1994-Two category of cases dealt with-Held,
under first category cases insurance company not liable under section 95 (/) D
(b) proviso (i) and (ii) as the vehicle involved is a goods vehicle-Liability
rests on the owner of the goods vehicle-Under third category cases claim
confined only to the owner or his representatives and not to gratuitous
passengers-Thus, Insurance Company liable only for the owner or his
representatives under section 147 (I) (i) and (ii)-Second category cases E
decided separately.

Constitution of India 1950

Art.136-New Plea-Raising of-Held, cannot be raised unless
foundation laid in the pleading. F
In these matters, the common question involved was as regards the
liability of payment of compensation by Insurance Company under the Motor
Vehicles Act on account of death or injury to either gratuitous passengers,
owner or his representatives while travelling in a goods vehicle. On appeal,
the cases were classified under three categorise, the first category arose G
under the Motor Vehicles Act 1939 as amended in 1969, second category
under the Motor Vehicles Act, 1988 prior to its amendment in 1994 and the
third category under the Motor Vehicles Act, 1988 pursuant to its amend1itent
in 1994. The first and third category cases were dealt under the present
appeals.
H'
679
680 SUPREME COURT REPORTS [2001] SUPP. 1 S.C.R.

A Claimants under the first category cases contended that the insurance
company is liable to pay· compensation under proviso (i) and (ii) of Section
95(1) (b) of the Motor Vehicles Act, 1939 even though the vehicle involved
was a goods vehicle. But the insurance company denied their liability.

Claimants under the third category of cases contended that ,the
B insurance company is liable to pay the compensation under section 147(1)
(i) and (ii) of the Motor Vehicles Act, 1988.

Disposing of the appeals, this Court

HELD: l.l Under the first category of cases vi:z. those arising under
C the 1939 Act, the insuarance company is not liable to pay compensation to
the claimants on account of the death or bodily injury of the gratuitous
passengers including owner or his representative of the goods, travelling in
a goods vehicle. The liability is on the owner of the goods vehicle. 1684-C, D)

Mallawwa (Smt.) and Ors. v. Oriental Insurance Co. Ltd. and Ors.,
D 11999) I sec 403, relied on.

1.2. In case insurance company had made part or full payment towards
such compensation awarded, the same shall not be recovered from the claimant
but is recoverable by the insurance company from the owners. In case the
amount has been withdrawn by the claimants on furnishing any security, the
E said security shall stand discharged. In case no payment has been made by
the claimant, the owners of the vehicles should pay the awarded compensation
to the claimant within a period of three mon!hs from today. 1684-D, El

2.1. Section 147 (I) (i) and (ii) of the Motor Vehicles Act 1988 holds
F the insurance company liable to pay the compensation both for the owner and
his representative and also for the gratuitous passengers travelling in a
goods vehicle. But under the third category of cases the claimants have
confined their claim only for the owner or his representatives who were
travelling in a goods vehicle and not for the gratuitous passenger. Therefore,
insurance company is liable to pay the compensation for the deceased or
G injured persons travelling in a good carriage, who were either the owners
or their representatives. 1684-G, H; 685-CI

New India Assurance Company v. Satpal Singh and Ors., 1200011 SCC
237, relied on.

H 2.2. Any compensation or part of it not paid shall be paid to the
RAMESH KUMAR v. NATIONAL INSURANCE CO. LTD. 681
claimant by the insurance company within eight weeks of the order. On such A
amount being withdrawn by the claimant which was deposited by the Insurance
Company on furnishing security, such security stands discharged. 1685-DJ

2.3. In the instant cases, a plea was raised whether the persons
travelling were truly owners of the goods or not. Only in cases where it is
recorded by the Tribunal that they were not the owners, the insurance B
company could succeed that they are not liable to pay. In any case if insurance
company has not raised any such issue they cannot be permitted to raise it
now. Unless such an issue was raised, foundation laid in the pleading, and
if not adjudicate by the Tribunal, thereafter if a ground is raised before the
High Court yet not decided there could be possibility of remanding the case, C
otherwise it cannot be permitted to be raised. 1685-E-F)

CIVIL AP PELLA TE JURISDICTION : Civil Appeal No. 50 I 0 of
1999.

From the Judgment and Order dated 12.6.98 of the Himachal Pradesh D
High Court in FA0176/90.

WITH

C.A. No. 5051/1999, C.A. No. 623/1997, C.A. No. 40/1986, C.A. No. 5457
of2001, C.A. No. 5458 of2001, C.A. Nos. 3393-3395of1996, C.A. Nos. 10846- E
10850of1996, C.A. No. 5459 of2001, C.A. No. 5460 of2001, C.A. Nos. 950-
957 of 1999; C.A. No. I 090 of 1999, C.A. No. 521 of 1993, C.A. No. 522 of
1993, C.A. No. 523of1993, C.A. Nos. 5461-62 of2001, C.A. No. 1249of1999,
C.A. No. 1253 of 1999, C.A. No. 1255 of 1999, C.A. No. 1254 of 1999, C.A. No.

-
1251of1999, C.A. No. 1252of1999, C.A. No. 5463 of2001, C.A. No. 6542 of F
1994, C.A. No. 6543 of 1994, C.A. No. 6544 of 1994, C.A. No. 6545 of 1994,
C.A. No. 5385 of2001, C.A. Nos. 16793-16796of1996, C.A. No. 229of1999,
C.A. Nos. 5386-5410 of2001, C.A. Nos. 5411-16 of2001, C.A. No. 5417 of2001,
C.A. Nos. 5418-27 of2001, C.A. No. 4458of1999, C.A. No. 5223 of2000, C.A.
Nos. 5428-32 of2001, C.A. No. 1697of1999, C.A. Nos. 5433-44 of2001, C.A.
No. 6237 of 1997, C.A. Nos. 272-77 of 1999, C.A. Nos. 5445-50 and 5450A of G
2001, C.A. Nos. 5451-52 of2001, C.A. Nos. 5453-56 of2001, C.A. No. 3843 of
2000, C.A. No. 5464 of 2001, C.A. No. 5465 of200 I, C.A. No. 6755of1999,
C.A. Nos. 5466-67 of2001, C.A. Nos. 5468-69 of2001.

Jitender Shanna, P.P. Malhotra, Rama Jois, Ashok Kumar Gupta, K.K.Jain,
Pramod Dayal, Anand Padmanabhan Ms. Lipika Sharma, S.K. Paul, Ms. Indra H
682 SUPREME COURT REPORTS [2001] SUPP. I S.C.R.

A Sahney, Kishore Rawat, M.K. Dua, Sunil Kapoor, Shailendra Sharma, Ms.
Rekha Palli, Ms. Pankaj Bala Verma, Ms. Kiran Suri, Sanjeev Das, Parmanand
Gaur, Ms. Minakshi Vij, N.M. Popli, Ms. Vrinda Dhar, T.C. Sharma, Joy Basu,
B.K. Satija, Jay Savla, K.K. Moni, Romy Chacko, Raj iv Mehta, Anil Sinha,
Naresh K. Sharma, Umesh Bhagwat, H.A. Raichura, Mahabir Singh, Rajiv
B Nanda, Ms. Neera Gupta, D.B.R. Vohra, S.N. Bhat, N.P.S. Panwar, D.P.
Chaturvedi, Uday Gupta, Vineet Kumar, Dr. K.S. Chauhan, J.S. Attri, S.
Srinivasan, Ms. B. Sunita Rao, V.B. Saharya, Sunil Kumar Jain, Vijay Hansaria,
Goodwill lndeevar, Arvind Kumar, Ms. Laxmi, Arvind, Mr. Sunil Gupta,
Ms. Binu Tamta, Rajesh Saxena, Anil Kumar Sangal, Anurag Pandey, V.D.
Khanna, K. Sharada Devi, S.C. Patel, M.T. George, Dr. Sushi! Balwada, Surya
C Kant, B.D. Shanna, Javed Mahmud Rao, E.C. Vidya Sagar, K. Khullar, R.C.
Kohli, A.V. Palli, P. Narasimhan, Ms. Biraj Tiwari, Uma Datta, C.S. Ashri,
M.K.D. Namboodiri, Sanjeev Malhotra, J.R. Midha, S. Ghosh, C.P. Pandey, Ajit
Pudussery, K.L. Nandwani, Vipin Nandwani for Debasis Misra, H. Wahi and
Ms. Meenakshi Vij for the appearing parties.

D The Judgment of the Court was delivered by

MISRA, J. Leave granted.

The aforesaid sets of cases have been classified in three categories,
which raises common question about the liability of payment of compensation
E by the Insurance Company under the Motor Vehicles Act.

Category I

CA No. 5010of1999, C.A. No. 5051/1999, C.A. No. 623/1997, C.A. No.
40/1986, C.A. No. 5457 of 200 I (arising out of SLP (9) 2031211997), C.A. No.
F 5458 of200l(arising out ofSLP (C) No. 20313of1997), C.A. Nos. 3393-3395
of 1996, C.A. Nos. 10846-10850of1996, C.A. No. 5459 of2001 (arising out SLP
(C) No. 13954 of2000), C.A. No. 5460 of2001 (arising out ofSLP (C) No. 14855
of2000), C.A. Nos. 950-957of1999, C.A. No. 1090 of 1999, C.A. No. 521 of
-
G
1993, C.A. No. 522of1993, C.A. No. 523of1993, C.A. Nos. 5461-62 of2001,
(arising out of SLP (C) No. 15554-15555 of2000), C.A. No. 1249 of 1999, C.A.
No. 1253of1999, C.A. No. 1255of1999. C.A. No. 1254of1999, C.A. No. 1251
-
of 1999, C.A. No. 1252 of 1999, C.A. No. 5463 of 200 I, (arising out of SLP No.
3938 of 1996), CA No. 6542 of 1994, CA No. 6543 of 1994, CA No. 6544 of
1994, and CA No. 6545 of 1994,

H Category II
RAMESH KUMAR v. NA T!ONAL INSURANCE CO.LTD. [MISRA, J.] 683
CA No. 5385 of 2001 (arising out of SLP (C) No. 9873 of 2000), C.A. A
16793-16796 of 1996, C.A. 229of1999, CA Nos. 5386-5410 of2001 (arising out
of SLP (C) Nos. 4098-4122 of2001), CA Nos. 5411-16 of 2001, (arising out of
SLP (C) Nos. 11427-11432 of 2001), CA No. 5417 of 200 I (arising out of SLP
(C) No. 11760 of2001), CA Nos. 5418-27 of2001 (arising out of SLP (C) Nos.
10938-10947 of2000), C.A. No. 4458of1999, C.A. No. 5223 of2000, CA Nos.
5428-32 of2001 (arising out ofSLP (C) Nos. 12889-93 of2001), C.A. No. 1697 B
of 1999, CA Nos. 5433-44 of2001 (arising out ofSLP (C) Nos. 12627-38 of
2000), C.A. No. 6237 of 1997, C.A. Nos. 272-77 of 1999, CA Nos. 5445-50 of
2001 (arising out ofSLP (C) Nos. 8116-22 of2001), CA Nos. 5451-52 of2001
(arising out ofSLP (C) Nos. 6956-57 of2001),CA Nos. 5453-56 of2001 (arising
out of SLP (C) Nos. 10419-22 of2001), and C.A. No. 3843 of 2000, C
Category JI/

CA No. 5464 of200!(arising out ofSLP (C) No. 3408 of2001), CA No.
5465 of200i(arising out ofSLP (C) No. 3409 of2001), C.A. No. 6755of1999,
CA Nos. 5466-67 of2001 (arising out ofSLP (C) Nos. 8765-66 of2001), and D
CA Nos. 5468-69 of2001 (arising out ofSLP (C) Nos. 9892-93 of2001).

The first category of cases arise out of the Motor Vehicles Act, 1939
(hereinafter referred to as 'Old Act'). The question raised for this category
is:

"Whether insurance company is liable to pay the compensation
E'
on account of the death or bodily injury of the gratuitous passengers
including owner or his representative of the goods, travelling in a
goods vehicle under Section 95 of the said Act?"

The second category of cases arise out of the Motor Vehicles Act, 1988 F
... (hereinafter referred to as 'New Act') prior to its amendment in 1994. In this
category also similar question is raised. The third category of cases also arise
under the new Act but after its amendment by Act No.54 of 1994. In this
category also the same question is raised.

Thus the question raised in all these cases is about the liability of the G
insurance company, for the payment of compensation to the claimants for
those falling under the aforesaid field on account of their death or bodily
injury while travelling in a goods vehicle. We are disposing of through this
judgment, the group of cases falling under category one and three respectively.
So far cases covered under category two, we will be dealing with it through
a separate judgment and order. · H
684 SUPREME COURT REPORTS [2001] SUPP. I S.C.R.

A The category one cases are all in which a claim petition has been filed
by the claimants on account of death or bodily injuries of either the owners
or his representative or the gratuitous passengers. In all these cases claimant
claimed compensation under Section 95(l)(b)(i) and clause (ii) of the proviso
after its amendment in 1969 under the old Act. The submission is, it is the
B insurance company, which is liable to pay the compensation not withstanding
that vehicle involved in the accident is a goods vehicle. On the other hand
submission for the insurance company is that they are not liable for those
passengers who travels by agoods vehicle, in view of the language used in
Section 95 of the old Act. The cases under this category need not detain us.
long as this question has been directly raised and decided in the case of
C Mallawwa (Smt.) and Ors. v. Oriental Insurance Co. ltd. and Ors., [1999] I
SCC 403. In this case the accidents were for the period between 1971 and
1985. This Court held, the insurance company is not liable for any damage
in cases the gratuitous passengers including owner of the goods or his
representative who travelled in a goods vehicle. So the first category of cases
are disposed of in term of this declaration that liability to pay compensation
D to the claimants of such person is not on the insurance company but on the
owner of the goods vehicle. In case insurance company had made part or full
payment towards such compensation awarded, the same shall not be refunded
from the claimant but is recoverable by the insurance company from the
owners. In case the amount has been withdrawn by the claimants on furnishing
E any security, the said security shall stand discharge. In case no payment or
part payment has been made by the claimant, we direct the owners of the
vehicle to pay the awarded compensation to the claimant within a period of
three months from today. Accordingly the first category of cases are disposed
of.

F This takes us to the third category of cases where similar question is
raised regarding liability of the insurance company under the new Act after ...
its 1994 amendment. The submission for the claimant is, the insurance company
is liable to pay the compensation both in view of the decision of this Court
in New India Assurance Company v. Satpa/ Singh and Ors., [2000] l SCC 237
G and also in view of its 1994 amendment. This Court in this case, while
interpreting Section 147(1 )(i) and (ii) of the New Act holds, the insurance
company liable to pay the compensation both for the owner and his
representative and also for the gratuitous passengers travelling in a goods
vehicle. In this third category, in spite of the said declaration the claimants
have confined their claim only for the owner or his representative who were
H travelling in a goods vehicle and not for the gratuitous passenger. Since
RAMESH KUMAR v. NATIONAL INSURANCE CO. LTD. [MISRA, .I.] 685

Satpa/ Singh (supra) confers right over gratuitous passengers also, which is A
not claimed by any of the claimants under this category, thus declaration of

- law in Satpal Singh (Supra) is not required to be considered for this category,
as claim for the owner and his representative is not disputed even by the
learned counsel for the insurance company, after its aforesaid 1994 amendment,
.. that insurance company is liable to pay compensation for such person even
when they were travelling in a goods vehicle. This is in view of 1994 amendment B
in sub-clause (I) of Section 14 7 ( 1)(b) of the new Act in which the following
words were brought in:

" ...... .injury to any person, including owner of the goods or his
authorised representative carried in a vehicle."
c
Thus this category of cases are also disposed of by declaring that
compensation awarded in such cases where deceased or injured persons were
travelling in a goods carriage who were owner or his authorised representative,
the insurance company is liable to pay the compensation. Any compensation
or part of it not paid shall be paid to the claimant by the insurance company D
within eight weeks of this order. Any such amount withdrawn by the claimant
which was deposited by the Insurance Company on furnishing security, such
security stands discharged.

Learned counsel appearing for the insurance company has submitted
that even though the insurance company is liable to pay to the legal E
representatives of the owner or authorised representative, the question is,
whether those travelling were truly owners of the goods or not? This in our
considered opinion is a question of fact which we need not advert. Only in
cases it is recorded by the Tribunal that they were not the owners then only
insurance company could succeed that they are not liable to pay. In any case
if insurance company has not raised any such issue they cannot be permitted F

- to raise it now. Unless such an issue was raised, foundation laid in the
pleading and if not adjudicated by the Tribunal thereafter if a ground is raised
before the High Court yet not decided there could be possibility of remanding
the case otherwise it cannot be permitted to be raised. We have not been
shown in any of these cases to qualify for the above. Accordingly we dispose G
of these cases falling under the third category, by declaring that the insurance
company is liable to pay the compensation for the deceased or injured persons
travelling in a goods carriage, who were either the owner or his representatives.
These appeals are disposed of accordingly.

N.J. Appeals disposed of.